Tod Volpe: A rogue's gallery

He was an art dealer with impeccable taste and friends in very high places. But then Tod Volpe 'borrowed' money from his clients and ended up in jail. Robert Hanks meets a master of fraud

"The American dream, right now," Tod Volpe believes, "is totally imprisoned by celebrity." And if anybody can bear witness to the truth of this, it is Tod – himself "a product of the American dream", someone who rose from humble beginnings to become a wealthy, successful art-dealer, who numbered Barbra Streisand, Jack Nicholson and Sylvester Stallone among his clients. But when things started to go wrong, his proximity to the world of celebrity made him a tempting target for the law. When the FBI arrested him on suspicion of fraud in 1997, it made headlines across the US. The shock-jock Howard Stern picked up his story. He was supposed to have scammed not just Barbra and Jack and Sly, but Bruce Willis, the producer Joel Silver (Die Hard, The Matrix), the director Joel Schumacher (Batman & Robin), and the music mogul David Geffen. The following year he was convicted and sentenced to 28 months in jail: imprisoned by celebrity in the most literal sense.

Tod's story begins in New York in the mid-1970s, when Tod and his cousin, Vance Jordan, decided to set up their own art gallery. Tod was already dealing in a small way on his own account, in between studying art history at New York University. He hit on the idea of pushing the Mission style of design – an American offshoot of the Arts and Crafts movement. Although the style had been critically admired and commercially successful at the turn of century, it had fallen out of fashion; chairs, sideboards and vases were gathering cobwebs in attics. Jordan and Volpe started buying up as much of the stuff as they could afford, and then set about creating a market for it. In the often conservative art world, Jordan-Volpe Gallery made a splash, with its dramatic lighting, unexpected juxtapositions of objects, and glossy catalogues. After a rave write-up in The New York Times, success came swiftly, and the gallery became a fashionable hang-out. People came not just to see the objets, but to gawp at the celebrity clients – Richard Gere would try out the chairs; Harvey Keitel took rocking-chairs home to test their rhythm.

"Barry Manilow would sneak by in a raccoon coat," Tod writes, "sheepishly admiring bronze putti. I walked over to him one afternoon and couldn't believe this feminine, frail creature wearing women's make-up was the owner of the voice we piped through our system every day." It was, you gather, a very classy and stylish joint indeed.

In the early Eighties, Tod – the showman of the partnership – was an art-world celebrity himself. He would spend his weekends at Steve Rubell's Palladium nightclub, rubbing shoulders with the artist Keith Haring, Christopher Reeve, Calvin Klein, staying up "until the wee hours of the morning, snorting my brains out until my limo would carry me home". He went to the photographer Robert Mapplethorpe's birthday party, and spent the evening fending off Mapplethorpe's pleas to sell some bronze heads of Pan that Tod had tucked away in his luxuriously furnished apartment.

Jordan-Volpe's exercise in market creation succeeded beyond their dreams: "In 10 years, the Arts and Crafts market became the biggest area of collecting in the decorative arts in the world." But as things got more competitive, profit margins declined. Tod's relations with his cousin became strained, and he began to think about moving on. He already had plenty of contacts on the west coast: Jack Nicholson – "the King of Hollywood", as Tod insists on calling him – had bought ceramics and pictures from him, and established a personal investment fund for Tod to buy and sell on his behalf. And Tod had stayed at Joel Silver's Frank Lloyd Wright mansion on Hollywood Boulevard, helping the producer furnish it on an extravagant scale.

Back in New York, Tod relates, he had a phone call from Silver and his business partner, Larry Gordon: "'What the hell are you doing?' they said in unison. 'Get your ass out here. You're gonna live like a king!'" Tod took the hint, and moved to Hollywood.

For a while, he did live like a king. Carrie Fisher and Jim Belushi were his friends; he made love to beautiful women on his divan. When Renny Harlin, the director of Nightmare on Elm Street 4 and Die Hard 2, got engaged to Geena Davis, Tod supplied the ring. A rumour went round that he was dating the actress Rebecca de Mornay, an ex of Tom Cruise's (he wasn't). Tod helped Bruce Willis buy a sideboard, and sold lamps to the producer Don Simpson. He hung out at Jack Nicholson's house, among Jack's collection of Cézannes, Picassos and Magrittes, which hung alongside the things that Tod had obtained for him: a fairy-tale image by the American artist Maxfield Parrish and a Tiffany bamboo floor lamp.

Tod's ambition was to turn his movie acquaintances to account, and make a film about the life of the art-dealer Joseph Duveen. This was his downfall: "I thought that the way you become a Hollywood player is by living and behaving the way they do, which means spending money like it's going out of style and living in these fabulous homes. I would have been better off if I'd been myself, stayed true to my art, and had just relied on my own achievements, and hadn't lived beyond my means."

He says that Silver offered him the chance to be associate producer on Lethal Weapon 4: "But I wanted to do something more artistic – something like Cinema Paradisio [sic]." In the end, his only concrete achievement in film was a credit on Die Hard for "special ceramic vessels".

With hindsight, Tod can see his mistake: "Had I not wanted to build a bridge to the movie business, creatively, I could have been a multimillionaire, and I wouldn't be sitting here in this room wondering how I'm gonna get back to New York. I could have charged these people like there was no tomorrow. I could have taken a $100,000 painting to Jack Nicholson, and sold it to him for $300,000 and Jack would not have questioned me..."

He is bitter that, after his arrest, the media presented Nicholson as a victim of his schemes. For Tod, their relationship was "a true friendship, and just a meeting of two people who had a certain compassion and respect for each other. Why? Because Jack recognised somebody who was trying to make changes in his life, who was going through similar things to him". He says that Nicholson remained supportive throughout all his troubles.

These began when, struggling to maintain his lifestyle, Tod began to juggle with money and art works – he took money to buy things for clients, and used it instead to stave off creditors; he sold art on clients' behalf without their permission. He moved back to New York and tried to revive his business; but his bank and fellow-dealers were becoming impatient and suspicious. In 1995, he was forced to file for bankruptcy, with debts of $3m; it was another two years before the bombshell of his arrest.

Tod doesn't deny he committed crimes, but says he was honestly trying to sort out his finances and pay people what he owed; he believes the FBI picked on him because of his connections. One of the first questions he was asked by the agent interrogating him was: what's Jack Nicholson really like?

In retrospect, though, he sees his time in prison as a healing experience: "The feeling I had in my heart when I finally walked out the door was love," he writes in Framed. And writing the book, too, has helped him to come to terms with what he did: "My journey, my particular journey, was to discover, you know, it may sound like a cliché, but that the most important thing in life is truth and love. And friendship. These are things I forgot." Now, there is talk of a film based on his experiences: "I think the ideal person to do the movie is Tom Cruise," he says.

'Framed: Tales of the Art Underworld' by Tod Volpe, Mainstream, £15.99